Indemnity Checks Flow to Farmers
As the claims come in from one of the worst droughts in decades, farmers and ranchers across the country are receiving indemnity payments for the losses they have incurred. To date, more than $2.6 billion has been sent to farmers. And while crop insurance can be purchased to protect 128 different crops, the top five crops that suffered the most damage from the 2012 drought are corn, wheat, cotton, soybeans and Pasture Rangeland and Forage.
- Farmers will invest more than $4.1 billion to purchase more than 1.2 million crop insurance policies.
- Those policies protect more than 281 million acres of eligible crops.
- 15,000 crop insurance agents and 5,000 loss adjusters are working around the clock to help farmers get their claims processed.
|
|
CROP INSURANCE IN ACTION
There was no way to hide from the drought in the Grain Belt. Just one year after the worst dry spell in a century devastated farmers in Texas, it spread like a virulent disease into the Midwest — the breadbasket for much of the world’s corn, soybeans and, of course, wheat.
The drought struck especially hard in Kansas, one of the biggest wheat producing states in the country. Jerry McReynolds, a well-known wheat producer in the northern part of the state, said the dry spell is “one of the most serious droughts we have ever encountered in my farming career.”
McReynolds plants 2,300 acres of winter wheat, 400 acres of corn, 250 acres of soybeans, 800 to 1,000 acres of grain sorghum and 150 acres of forage sorghum. He also runs his own cattle operation. Like many American farms, it is a joint operation by the McReynolds family.
McReynolds says he has never encountered a litany of problems quite like those in 2012. “All spring planted crops really suffered. Germination was a problem. The weather was extremely hot for a very long period of time, without moisture. We encountered temps to 115 degrees,” he said.
“Crop insurance is critical to our operation. I had a 70 percent level of coverage. However, that only provides around 60 to 65 percent coverage,” he explained. |
|
IN THE NEWS
When the Cedar Rapids Gazette cited a study about by Environmental Working Group, a Washington-DC based group critical of both farmers and crop insurance, Steve Hamilton, a farmer from Oakland, Iowa, responded:
“The Environmental Working Group is critical of crop insurance and was quoted that ‘farmers are praying for drought, not rain’ this year.,” he noted. “The statement shows a lack of understanding of how crop insurance works and a callous attitude toward the American farmer.”
Hamilton explained that in Iowa, “the same farmers who faced record flooding last year are facing severe drought this year, which underscores the need for effective risk management tools in agriculture.” He noted that farmers purchase crop insurance as a way to shelter themselves from Mother Nature.
“Most Iowa farmers purchase crop insurance yearly, but rarely collect indemnities. For example, in 2011, Iowa farmers spent $444 million of their money to purchase 124,000 crop insurance policies, of which only 15,000 were indemnified,” he noted. “The crop insurance system saves taxpayers money.”
Read his full letter here.
|
